What Income Do You Need for an FHA Loan as a First-Time Buyer?

Buying your first home feels exciting-until you hit the income question. If you're looking at an FHA loan, you might be wondering: What income is needed for an FHA loan? The truth? There’s no set salary number. But that doesn’t mean you can just guess. FHA loans are designed for people who don’t have a huge down payment or perfect credit, but lenders still need to know you can pay back what you borrow. Here’s how it actually works.

FHA loans don’t set a minimum income-they set a maximum debt-to-income ratio

Most people assume lenders look at your paycheck and say, ‘Earn $50,000 or more.’ That’s not how FHA works. Instead, they look at your debt-to-income ratio (DTI). This is the percentage of your monthly income that goes toward debt payments-including your new mortgage, car loans, student loans, credit cards, and even child support.

FHA allows a maximum DTI of 43% for most borrowers. That means if your gross monthly income is $5,000, your total monthly debt payments (including your new mortgage) can’t exceed $2,150. Some lenders will stretch that to 50% if you have strong credit or big savings, but 43% is the standard.

Let’s say you want a house with a $1,200 monthly mortgage payment. Your car loan is $300. Your student loan is $200. Your credit card minimums add up to $150. That’s $1,850 in debt. To stay under 43%, you’d need a gross monthly income of at least $4,300. That’s $51,600 a year. That’s the real number you’re working toward-not a magic income floor.

Your income must be stable and verifiable

FHA doesn’t care if you make $60,000 if you can’t prove it. Lenders need to see a two-year work history in the same line of work. If you switched from retail to nursing, that’s fine-as long as you’ve been doing it for two years. Freelancers? You need two years of tax returns showing consistent income. Commission-based salespeople? You need to show average earnings over the last two years, not just your best month.

One common mistake first-time buyers make: they take a side gig to boost income right before applying. That doesn’t help. FHA requires steady, reliable income. A part-time job you started last month won’t count. A bonus you got once? Doesn’t count. Only recurring income that’s likely to continue.

What if your income is low? You still might qualify

Many first-time buyers think they’re too low-income for a home. But FHA loans were made for people in this exact situation. In 2025, the median household income in the U.S. is around $75,000. But FHA loans are approved for people earning well below that.

In rural areas or smaller cities, people earning $35,000-$45,000 a year regularly buy homes with FHA loans. How? Because their housing costs are lower, and their other debts are minimal. A single person in Ohio making $40,000 a year with no car payment and no student loans can easily qualify for a $150,000 home. But someone in San Francisco making $60,000 with $800 in car payments and $400 in student loans might not.

It’s not about how much you make. It’s about how much you owe compared to what you make.

Down payment and credit score matter too

Income isn’t the only factor. FHA loans let you put as little as 3.5% down-but only if your credit score is 580 or higher. If your score is between 500 and 579, you need 10% down. That changes everything.

Let’s say you want a $200,000 home. With a 580+ credit score, you need $7,000 down. With a 550 score, you need $20,000. That’s a huge difference. If you don’t have the cash for the higher down payment, you might need to wait and improve your credit first-even if your income is perfect.

Also, FHA requires mortgage insurance. That’s not optional. You pay an upfront fee (1.75% of the loan) and an annual fee (usually 0.45%-1.05% of the loan balance) added to your monthly payment. That’s extra money lenders add to your DTI calculation. So even if your mortgage payment looks affordable, the insurance could push you over the 43% limit.

What income do you need to buy a $250,000 home with FHA?

Let’s break it down with real numbers. You’re buying a $250,000 home. You’re putting 3.5% down: $8,750. Your loan amount is $241,250. At a 6.5% interest rate, your principal and interest payment is about $1,525 per month.

Add the FHA mortgage insurance: $130/month. Add property taxes: $250/month. Add homeowner’s insurance: $80/month. Total monthly payment: $1,985.

Now add other debts: car payment ($350), student loan ($200), credit card ($100). Total monthly debt: $2,635.

To stay under 43% DTI, your gross monthly income needs to be at least $6,128. That’s $73,536 per year.

That’s the number. But if you cut your car payment to $200 and pay off your credit card, your total debt drops to $2,185. Now you only need $5,081 monthly income-$61,000 a year.

Small changes make a big difference.

How to boost your chances if your income is borderline

If you’re close to the limit, here’s what actually works:

• Pay down credit cards. Even $2,000 paid off can drop your monthly minimums enough to qualify.
• Delay buying a car until after you close. A new car loan can kill your approval.
• Get a co-signer with strong income and credit. Their income counts too.
• Apply with a credit union. They often have more flexibility than big banks.
• Use an FHA-approved counselor. They’ll review your finances and tell you exactly what to fix.

Don’t just focus on raising your income. Focus on lowering your debt. That’s where most first-time buyers get stuck.

What happens if you don’t qualify?

If your DTI is too high or your income isn’t stable, you’re not out of options. You can:

• Wait six months, pay off debt, and reapply.
• Save for a bigger down payment to reduce your loan amount.
• Look for homes in lower-cost areas where your income goes further.
• Ask a family member to gift you the down payment (FHA allows this with a letter).
• Apply for local first-time buyer programs. Many cities offer down payment assistance that lowers your monthly payment.

One buyer in Atlanta didn’t qualify on her own. She got a $5,000 grant from her city’s first-time homebuyer program. That cut her loan amount by $10,000. Her monthly payment dropped $75. Her DTI went from 47% to 41%. She got approved.

It’s not about being rich. It’s about being prepared.

Final checklist: Are you ready to apply?

Before you start the FHA loan process, ask yourself:

• Do I have two years of steady income documented?
• Do I know my exact monthly debt payments?
• Have I checked my credit score? (FHA requires at least 500.)
• Can I afford the 3.5% down payment plus closing costs?
• Have I gotten pre-approved by an FHA-approved lender?

If you answered yes to all of these, you’re in a good position. If not, fix one thing at a time. You don’t need to earn six figures to buy your first home. But you do need to understand the math behind the loan.